1

Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors

(Act No. 166 of June 10, 1957)

Chapter I General Provisions (Articles 1 and 2) Chapter II Regulations Concerning Refining Activities (Articles 3 to 12-7) Chapter III Regulations Concerning Fabrication and Enrichment Activities

(Articles 13 to 22-9) Chapter IV Regulations Concerning the Installment, Operation, etc. of

Reactors (Articles 23 to 43-3-4) Chapter IV-2 Regulations Concerning Interim Storage Activities (Articles 43-4

to 43-28) Chapter V Regulations Concerning Reprocessing Activities (Articles 44 to 51) Chapter V-2 Regulations Concerning Waste Disposal or Storage Activities

(Articles 51-2 to 51-26) Chapter V-3 Regulations Concerning the Use, etc. of Nuclear Fuel Material, etc.

(Articles 52 to 57-8) Chapter VI Regulations, etc. Concerning Licensee of Nuclear Energy Related

Activities, etc. (Articles 58 to 61-2) Chapter VI-2 Regulations, etc. Concerning the Use, etc. of International

Controlled Material Section 1 Regulations Concerning the Use, etc. of International Controlled

Material (Articles 61-3 to 61-9-4) Section 2 Designated Information Processing Organizations (Articles 61-10 to

61-23) Section 3 Designated Organizations Implementing Safeguards Inspections,

etc. (Articles 61-23-2 to 61-23-21) Chapter VI-3 Welding Inspections, etc. Conducted by JNES (Articles 61-24 to

61-27) Chapter VII Miscellaneous Provisions (Articles 62 to 76) Chapter VIII Penal Provisions (Articles 77 to 84) Chapter IX Release, etc. of Foreign Vessels Subject to Security Money, etc.

(Articles 85 to 89) Supplementary Provisions

Chapter I General Provisions

(Objectives)

Article 1 This Act, in accordance with the spirit of the Atomic Energy Basic Act

2

(Act No. 186 of 1955), is enacted for the purpose of providing necessary regulations on refining activities, fabricating and enrichment activities, interim storage activities, reprocessing activities and waste disposal activities, as well as on the installment and operation, etc. of reactors, and also for the purpose of providing necessary regulations on the uses of international controlled material to execute treaties or other international agreements concerning the research, development and use of atomic energy, in order to ensure that the uses of nuclear source material, nuclear fuel material and reactors are limited to peaceful ones and carried out in a planned manner, and at the same time, to ensure public safety by preventing hazards due to these materials and reactors and protecting nuclear fuel material.

(Definitions)

Article 2 (1) The term "nuclear energy" as used in this Act means atomic energy provided for in item (i) of Article 3 of the Atomic Energy Basic Act.

(2) The term "nuclear fuel material" as used in this Act means nuclear fuel material provided for in item (ii) of Article 3 of the Atomic Energy Basic Act.

(3) The term "nuclear source material" shall mean nuclear source material provided for in item (iii) of Article 3 of the Atomic Energy Basic Act.

(4) The term "reactor" as used in this Act means reactor provided for in item (iv) of Article 3 of the Atomic Energy Basic Act.

(5) The term "specified nuclear fuel material" as used in this Act means plutonium (excluding that having an isotopic concentration of plutonium 238 exceeding 80 percent), uranium 233, uranium with a ratio of uranium 233 and uranium 235 to uranium 238 exceeding the ratio of natural composition and other nuclear fuel material specified by Cabinet Order.

(6) The term "refining" as used in this Act means chemical processing of nuclear source material or nuclear fuel material in order to increase the content of uranium or thorium contained in nuclear source material or nuclear fuel material.

(7) The term "fabricating and enrichment" as used in this Act means physical or chemical processing of nuclear fuel material in order to change the nuclear fuel material into such a form or composition that it may be used as fuel in a reactor.

(8) The term "reprocessing" as used in this Act means the chemical processing of nuclear fuel material which has been spent as fuel in a reactor or other nuclear fuel which has been subject to nuclear fission reaction (hereinafter referred to as "spent fuel") in order to separate nuclear fuel material or other useful material from spent fuel.

(9) The term "international controlled material" as used in this Act means nuclear source material, nuclear fuel material, a reactor or other material or

3

equipment subject to safeguards or other controls based on agreements between the government of Japan and the International Atomic Energy Agency in implementation of paragraphs 1 and 4 of Article III of the Treaty on the Non-Proliferation of Nuclear Weapons (hereinafter referred to as "safeguards agreement") as well as other international agreements between the government of Japan and the government of a foreign country (including international organizations) concerning the research, development and use of atomic energy (excluding protocol additional to the agreement between the government of Japan and the International Atomic Energy Agency c in implementation of paragraphs 1 and 4 of Article III of the Treaty on the Non-Proliferation of Nuclear Weapons (hereinafter referred to as "additional protocol")) (hereinafter referred to as "international agreements").

(10) The Minister of Education, Culture, Sports, Science and Technology (hereinafter referred to as "Minister of MEXT") shall give public notices regarding the international controlled material set forth in the preceding paragraph.

(11) The term "internationally-specified activities" as used in this Act means the activities listed in Additional Annex I.

Chapter II Regulations Concerning Refining Activities

(Designation of Activity)

Article 3 (1) Any person who intends to carry out refining activities shall obtain designation by the Minister of Economy, Trade and Industry (hereinafter referred to as "Minister of METI"), pursuant to the provision of Cabinet Order.

(2) Any person or organization who intends to obtain the designation set forth in the preceding paragraph shall submit a written application containing the following items to the Minister of METI: (i) its name and address and, in the case of a juridical person, the name of its

representative, (ii) the name and address of the factory or place of activity where refining

equipment and auxiliary facilities (hereinafter referred to as "refining facilities") are to be installed,

(iii) the location, structure and equipment of refining facilities, and the refining method, and

(iv) a construction plan for the refining facilities.

(Criteria for Designation) Article 4 (1) When the application for the designation set forth in paragraph (1)

of the preceding Article is made, the Minister of METI shall not authorize the designation in the same paragraph unless the Minister finds that the

4

application conforms with each of the following items: (i) that approval of the application will not hinder the planned development

and utilization of nuclear energy, (ii) that the applicant has sufficient technical capability and financial basis for

executing the activity competently, and (iii) that the location, structure and equipment of the refining facilities are

such that they will not hinder the prevention of disasters resulting from nuclear source material or nuclear fuel material.

(2) In making the designation set forth in paragraph (1) of the preceding Article, the Minister of METI shall hear, in advance, the opinion of the Atomic Energy Commission with respect to the application of criteria provided for in items (i) and (ii) of the preceding paragraph (limited to the portion pertaining to the financial basis only) and the opinion of the Nuclear Safety Commission with respect to the application of criteria provided for in item (ii) (limited to the portion pertaining to technical capability only) and item (iii) of the preceding paragraph.

(Ineligibility for the Designation)

Article 5 No person who falls under any of the following items shall be granted the designation under Article 3 (1): (i) a person whose designation under Article 3 (1) has been rescinded, pursuant

to the provision of Article 10 (2), and for whom two years have not yet elapsed from the day of the rescission,

(ii) a person who has been sentenced to a penalty consisting of a fine or severer punishment for violating the provisions of this Act or an order pursuant to this Act, and for whom two years have not yet elapsed after the penalty was executed or suspended,

(iii) an adult ward, or (iv) a juridical person any of whose executive officials falls under any of the

three preceding items.

(Permission for and Notification of Changes) Article 6 (1) When a person who has obtained the designation set forth in Article

3 (1) (hereinafter referred to as "licensee of refining activity") intends to change any matter provided for in item (ii) or (iii) of paragraph (2) of said Article, he/she shall obtain the permission of the Minister of METI, pursuant to the provision of the Cabinet Order; provided, however, that this shall not apply to changing, from among the matters listed in item (ii) of said paragraph, only the name of the factory or the place of activity.

(2) When a licensee of refining activity has changed any matter provided for in item (i) or (iv) of Article 3 (2), with the exception of the case prescribed in

5

Article 9 (1), he/she shall notify the Minister of METI of the change within thirty days from the day that the change was made. The same shall apply to changes made to, from among the matters listed in item (ii) of said paragraph, only the name of the factory or the place of activity.

(3) The provision of Article 4 shall apply mutatis mutandis to the permission set forth in paragraph (1).

(Notification of Commencement of Activity, etc.)

Article 7 When a licensee of refining activity has commenced, suspended or restarted his/her activity, he/she shall notify the Minister of METI within fifteen days from the day concerned.

(Merger)

Article 8 (1) In the case of a merger of juridical persons who are licensees of refining activity (except in the case of a merger of a juridical person who is a licensee of refining activity and a juridical person who is not a licensee of refining activity, and where the juridical person who is the licensee of refining activity continues to exist), when the approval of the Minister of METI has been obtained for the merger, the juridical person who is to continue to exist after the merger, or the juridical person who has been established by the merger shall succeed to the status of licensee of refining activity.

(2) The provisions of item (i) and (ii) of Article 4 (1), paragraph (2) of said Article, and Article 5 shall apply mutatis mutandis to the approval set forth in the preceding paragraph.

(Inheritance)

Article 9 (1) In the case of an inheritance with regard to a licensee of refining activity, the inheritor shall succeed to the status of the licensee of refining activity.

(2) The inheritor who has succeeded to the status of the licensee of refining activity pursuant to the provision of the preceding paragraph shall notify the Minister of METI of the inheritance within thirty days from the day of the inheritance, with documents to prove the inheritance.

(Rescission, etc. of Designation)

Article 10 (1) When a licensee of refining activity fails to commence his/her activity within the period provided for in the Ordinance of the Ministry of Economy, Trade and Industry (hereinafter referred to as "Ordinance of METI"), or suspends his/her activity for more than one year continuously, without justifiable grounds, the Minister of METI may rescind the designation set forth in Article 3 (1).

6

(2) When a licensee of refining activity falls under any of the following items, the Minister of METI may rescind the designation set forth in Article 3 (1), or specify a period not exceeding one year and order suspension of the activity for that period: (i) when a licensee of refining activity falls under one of items (ii) to (iv) of

Article 5, (ii) when he/she has changed a matter for which he/she should have obtained

permission pursuant to the provision of Article 6 (1), without permission, (iii) when he/she has violated an order pursuant to the provision of Article 11-2

(2), (iv) when he/she has violated an order pursuant to provision of Article 12 (1) or

(4), or an order pursuant to the provision of paragraph (3) of the said Article, (v) when he/she has violated the provision of Article 12-2 (1) or (4), or an order

pursuant to the provision of paragraph (3) of said Article, (vi) when he/she has violated the provision of Article 12-3 (1), (vii) when he/she has violated the provision of Article 12-5, (viii) when he/she has violated the provision of Article 12-6 (1) and has

abolished his/her refining activity, (ix) when he/she has violated the provision of Article 12-6 (2), (x) when he/she has violated the provision of Article 58 (2), or has violated an

order pursuant to the provision of paragraph (3) of said Article, (xi) when he/she has violated the provision of Article 59 (2), or has violated an

order pursuant to paragraph (4) of said Article, (xii) when he/she has violated the provision of Article 59-2 (2), or (xiii) when he/she has violated the conditions of Article 62-2 (1) or (2).

(Records)

Article 11 Pursuant to the provision of the Ordinance of METI, the licensee of refining activity shall record the matters specified in the Ordinance of METI concerning the implementation of the refining activity, and keep this record at the factory or the place of activity.

(Measures To Be Taken for Physical Protection of Specific Nuclear Fuel

Material, etc.) Article 11-2 (1) If a licensee of refining activity handles any specified nuclear

fuel material at a factory or place of activity where refining facilities have been installed and where the Cabinet Order requires, the licensee of refining activity shall, pursuant to the provision of the Ordinance of METI, establish and manage areas for the physical protection of specific nuclear fuel material, control specified nuclear fuel material by means of locking, etc. the material, perform maintenance and inspection of equipment and devices necessary for

7

the physical protection of specific nuclear fuel material, and take any other necessary measures for the physical protection of specific nuclear fuel material (hereinafter referred to as "protective measures").

(2) When the Minister of METI finds that any protective measures are in violation of the Ordinance of METI based on the provision set forth in the preceding paragraph, he/she may order the licensee of refining activity to correct the measures pertaining to areas for the physical protection of specific nuclear fuel material, correct the handling method of specified nuclear fuel material, and take any other measures necessary for the protection of specified nuclear material (hereinafter referred to as "corrective measures").

(Operational Safety Programs)

Article 12 (1) If a licensee of refining activity conducts activity consisting of refining nuclear fuel material, he/she shall, pursuant to the provision of the Ordinance of METI, specify operational safety programs (including rules concerning education on operational safety of nuclear fuel material handling; hereinafter the same shall apply in this Article) before commencing activity and obtain the approval of the Minister of METI. The same shall apply when amendments are made to such programs.

(2) When the Minister of METI finds that the operational safety programs are not sufficient for preventing disasters resulting from nuclear fuel material, he/she shall not grant the approval set forth in the preceding paragraph.

(3) When the Minister of METI finds that the operational safety programs need to be amended for preventing disasters resulting from nuclear fuel material, he/she may order the licensee of refining activity to amend the operational safety programs.

(4) Any licensee of refining activity and his/her employees must observe the operational safety programs.

(5) Any licensee of refining activity shall undergo an inspection conducted by the Minister of METI at periodic intervals pursuant to the provision of the Ordinance of METI regarding the compliance with the provision set forth in the preceding paragraph.

(6) In conducting the inspection set forth in the preceding paragraph, the official designated by the Minister of METI may carry out the matters listed below as specified by the Ordinance of METI: (i) enter the office, factory or place of activity, (ii) inspect books, documents or any other necessary property, (iii) question people concerned, and (iv) request the submission of nuclear source material, nuclear fuel material or

any other necessary samples (limited to the minimum amount necessary for analysis).

8

(7) When the official enters pursuant to the provision of item (i) of the preceding paragraph, he/she shall carry an identification card and produce it when requested by people concerned.

(8) The authority pursuant to the provision of paragraph (6) shall not be construed as one that is authorized for a criminal investigation.

(Physical Protection Program)

Article 12-2 (1) In the case where the provision of Article 11-2 (1) is applicable, the licensee of refining activity shall, pursuant to the provision of the Ordinance of METI, provide physical protection program and obtain the approval of the Minister of METI before commencing the operation of specified nuclear material. The same shall also apply when amendments are made to such program.

(2) When the Minister of METI finds that the physical protection program are not sufficient for protecting specified nuclear fuel material, he/she shall not grant the approval set forth in the preceding paragraph.

(3) When the Minister of METI finds that an amendment in the physical protection program is necessary for protecting specified nuclear fuel material, he/she may order the licensee of refining activity to amend the physical protection program.

(4) Any licensee of refining activity and his/her employees must observe the physical protection program.

(5) The licensee of refining activity shall undergo an inspection conducted by the Minister of METI at periodic intervals pursuant to the provision of the Ordinance of METI regarding the compliance with the provision set forth in the preceding paragraph.

(6) In conducting the inspection set forth in the preceding paragraph, the official designated by the Minister of METI may carry out the matters listed below as specified by the Ordinance of METI: (i) enter the office, factory or place of activity, (ii) inspect books, documents or any other necessary property, (iii) question people concerned, and (iv) request the submission of specified nuclear fuel material or any other

necessary samples (limited to the minimum amount necessary for analysis). (7) When the official enters pursuant to the provision of item (i) of the preceding

paragraph, he/she shall carry an identification card and produce it when requested by people concerned.

(8) The authority pursuant to the provision of paragraph (6) shall not be construed as one that is authorized for a criminal investigation.

(Physical Protection Manager)

9

Article 12-3 (1) In the case provided in the provisions of Article 11-2 (1), the licensee of refining activity shall, pursuant to the provision of the Ordinance of METI, appoint a physical protection manager from among persons who satisfy the requirements provided in the Ordinance of METI related to knowledge, etc. of the handling of specified nuclear fuel material, etc., and have this physical protection manager manage activity related to the protection of specified nuclear fuel material in a consistent manner.

(2) When any licensee of refining activity has appointed a physical protection manager pursuant to the provision of the preceding paragraph, the licensee of refining activity shall notify the Minister of METI of the appointment within thirty days of the date of appointment. The same shall apply to the dismissal of the physical protection manager.

(Duties, etc. of the Physical Protection Manager)

Article 12-4 (1) The physical protection manager shall execute his/her duties in good faith.

(2) Any person entering a refining facility shall comply with instructions given by the physical protection manager for the purpose of ensuring the execution of this Act or an order pursuant to this Act or the execution of the provisions of the physical protection program.

(Order to Dismiss the Physical Protection Manager)

Article 12-5 When the physical protection manager has violated this Act or an order pursuant to this Act, the Minister of METI may order the licensee of refining activity to dismiss the physical protection manager.

(Measures Associated with Abolition of the Activity)

Article 12-6 (1) When the licensee of refining activity intends to abolish his/her activity, he shall dismantle the refining facilities, transfer the nuclear fuel material that he/she possesses, eliminate the material contaminated by nuclear fuel material, dispose of material contaminated by nuclear fuel material and take any other measures specified in the Ordinance of METI (hereinafter referred to as "decommissioning" in this Article and the following Article).

(2) When the licensee of refining activity intends to take decommissioning, he/she shall draw up a plan concerning decommissioning (hereinafter referred to as "decommissioning plan" in this Article and the following Article) in advance, pursuant to the provision of the Ordinance of METI, and obtain the approval of the Minister of METI.

(3) When the licensee of refining activity intends to amend the decommissioning plan for which he/she has obtained the approval as set forth in the preceding

10

paragraph, he/she shall obtain approval from the Minister of METI pursuant to the provision of the Ordinance of METI; provided, however, that this shall not apply to a case where the licensee of refining activity intends to make a minor amendment as specified in the Ordinance of METI.

(4) When the Minister of METI finds that the decommissioning plan pertaining to the application for approval as set forth in the two preceding paragraphs conforms with the standards provided for in the Ordinance of METI, he/she shall grant approval as set forth in the two preceding paragraphs.

(5) When the licensee of refining activity has made a minor amendment as provided for by the Ordinance of METI as specified in the proviso of paragraph (3) to the decommissioning plan for which he/she has obtained the approval as set forth in paragraph (2), he/she shall notify the Minister of METI regarding such an amendment.

(6) The licensee of refining activity shall take decommissioning measures in compliance with the decommissioning plan for which he/she has obtained the approval as set forth in paragraph (2) (modified plan for abolition measures in the case that there has been approval or notification regarding an amendment pursuant to the provision of paragraph (3) or the preceding paragraph.).

(7) The Minister of METI may order a licensee of refining activity who has taken decommissioning measures that are in violation of the provision set forth in the preceding paragraph to establish measures necessary for preventing disasters resulting from nuclear fuel material or material contaminated by nuclear fuel material.

(8) Upon completion of decommissioning measures, the licensee of refining activity shall obtain confirmation from the Minister of METI regarding whether the results of the measures conform with the standards provided for in the Ordinance of METI.

(9) When the licensee of refining activity has obtained the confirmation provided for in the preceding paragraph, the designation set forth in Article 3 (1) shall cease to be effective.

(Measures associated with Rescission, etc. of the Designation)

Article 12-7 (1) When the licensee of refining activity has his/her designation rescinded pursuant to the provision of Article 10, or when the licensee of refining activity has dissolved or died, and there is no inheritance pursuant to the provision of Article 8 (1) or Article 9 (1), the former licensee of refining activity, etc. (a person who controls the inherited property in lieu of the liquidator, bankruptcy trustee or heir when the licensee of refining activity has his/her designation rescinded pursuant to the provision of Article 10 or when the licensee of refining activity has dissolved or died, and there is no inheritance pursuant to the provision of Article 8 (1) or Article 9 (1); the same

11

shall apply hereinafter) shall be deemed to be the licensee of refining activity regarding the application of the provisions of Article 11 to Article 12-5 (including penal provisions pertaining to these provisions) for the period until the confirmation as provided for in paragraph (9) is obtained.

(2) Pursuant to the provision of the Ordinance of METI, the former licensee of refining activity, etc. shall draw up a plan for decommissioning measures and apply for approval from the Minister of METI within the period provided for in the Ordinance of METI from the date that his/her designation as a refining licensee of activity was rescinded pursuant to the provision of Article 10 or the date of dissolution or death of the licensee of refining activity.

(3) The former licensee of refining activity, etc. shall not take decommissioning measures for the period until he/she obtains the approval set forth in the preceding paragraph.

(4) When the former licensee of refining activity, etc. intends to amend the decommissioning plan for which permission has been obtained as provided for by paragraph (2), he/she shall obtain the approval of the Minister of METI pursuant to the provision of the Ordinance of METI; provided, however, that this shall not apply to minor amendment specified by the Ordinance of METI.

(5) When the Minister of METI finds that the decommissioning plan pertaining to application for approval as set forth in paragraph (2) and the preceding paragraph conforms with the standards specified by the Ordinance of METI as provided for by paragraph (4) in the preceding Article, he/she shall grant the approval as provided for by paragraph (2) and the preceding paragraph.

(6) When the former licensee of refining activity, etc. has made a minor amendment as provided for by the Ordinance of METI in the proviso of paragraph (4) to a decommissioning plan for which the approval specified in paragraph (2) has been obtained, he/she shall notify the Minister of METI of this minor change.

(7) The former licensee of refining activity, etc. shall take decommissioning measures in compliance with the decommissioning plan for which the approval specified in paragraph (2) has been obtained (modified decommissioning plan in the case that there has been approval or notification regarding a change pursuant to the provision of paragraph (4) or the preceding paragraph).

(8) The Minister of METI may order any licensee of former refining activity, etc. who has taken decommissioning measures that are in violation of the provision set forth in the preceding paragraph to establish measures necessary for preventing disasters resulting from nuclear fuel material or material contaminated by nuclear fuel material.

(9) Upon completion of decommissioning measures, the former licensee of refining activity, etc. shall obtain confirmation from the Minister of METI regarding whether the results of the measures conform with the standards

12

provided for in the Ordinance of METI as specified by paragraph (8) of the preceding Article.

Chapter III Regulations Concerning Fabrication and Enrichment Activity

(Permission for the Activity)

Article 13 (1) Any person who intends to carry out a fabrication or enrichment activity shall obtain the permission of the Minister of METI, pursuant to provision of a Cabinet Order.

(2) Any person who intends to obtain the permission set forth in the preceding paragraph shall submit to the Minister of METI an application form containing the following matters: (i) its name and address and, in the case of a juridical person, the name of its

representative, (ii) the name and the address of the factory or the place of activity where

fabricating or enrichment equipment and auxiliary facilities (hereinafter referred to as "fuel facilities") are to be installed,

(iii) the location, structure and equipment of the fuel facilities and the method of fabricating or enrichment, and

(iv) a construction plan for the fuel facilities.

(Criteria for the Permission) Article 14 (1) When an application for the permission set forth in paragraph (1)

of the preceding Article is made, the Minister of METI shall not grant permission unless he/she finds that the application conforms with each of the following items: (i) that to grant the permission will not make the fabricating or enrichment

capacity unduly excessive, (ii) that the applicant has sufficient technical capability and financial basis

sufficient for executing the activity competently, and (iii) that the location, structure and equipment of the fuel facilities are such

that they will not hinder the prevention of disasters resulting from nuclear fuel material.

(2) In granting the permission set forth in paragraph (1) of the preceding Article, the Minister of METI shall hear, in advance, the opinion of the Atomic Energy Commission with respect to the application of criteria provided for in items (i) and (ii) of the preceding paragraph (limited to the portion pertaining to financial basis only) and the opinion of the Nuclear Safety Commission with respect to the application of criteria provided for in item (ii) (limited to the portion pertaining to technical capability only) and item (iii) of the preceding paragraph.

13

(Ineligibility for Permission)

Article 15 No person who falls under any of the following items shall be granted the permission under Article 13 (1): (i) a person whose permission under Article 13 (1) has been rescinded,

pursuant to the provision of Article 20 (2), and for whom two years have not yet elapsed from the day of rescission,

(ii) a person who has been sentenced to a penalty consisting of a fine or severer punishment for violating the provisions of this Act or an order pursuant to this Act, and for whom two years have not yet elapsed after the penalty was executed or suspended,

(iii) an adult ward, or (iv) a juridical person any of whose executive officials falls under any of the

three preceding items.

(Permission for and Notification of Changes) Article 16 (1) When a person who has obtained the permission set forth in

Article 13 (1) (hereinafter referred to as "licensee of fabricating or enrichment activity") intends to amend any matter provided for in item (ii) or (iii) of paragraph (2) of said Article, he/she shall obtain the permission of the Minister of METI, pursuant to the provision of the Cabinet Order; provided, however, that this shall not apply to amendment, from among the matters listed in item (ii) of said paragraph, only the name of the factory or the place of activity.

(2) When a licensee of fabricating or enrichment activity has amended any matter provided for in item (i) or (iv) of Article 13 (2), except the case prescribed in Article 19 (1), he/she shall notify the Minister of METI of the change within thirty days from the day that the amendment was made. The same shall apply to amendment made to, from among the matters listed in item (ii) of said paragraph, only the name of the factory or the place of activity.

(3) The provision of Article 14 shall apply mutatis mutandis to the permission provided for in paragraph (1).

(Approval of the Design and Construction Method)

Article 16-2 (1) The licensee of fabricating or enrichment activity shall, pursuant to the provision of the Ordinance of METI, obtain the approval of the Minister of METI with respect to the design and construction method of the fuel facilities (except for welding methods pertaining to the fuel facilities provided in Article 16-4 (1) that are to be welded; hereinafter the same shall apply in this Article) before commencing construction work on the fuel facilities. The same shall also apply when making modifications to fuel facilities.

(2) When any licensee of fabricating or enrichment activity intends to amend the

14

design and construction method related to a fuel facility for which the approval set forth in the preceding paragraph has been obtained, he/she shall obtain the approval of the Minister of METI pursuant to the provision of the Ordinance of METI; provided, however, that this shall not apply to a minor amendment as provided for by the Ordinance of METI.

(3) When the Minister of METI finds that the design and construction method pertaining to the application for approval set forth in the two preceding paragraphs conforms with the following items, he/she shall grant the approval set forth in the two preceding paragraphs: (i) that the permission set forth in Article 13 (1) or paragraph (1) of the

preceding Article has been obtained for the design and construction method, or an application for permission has been submitted pursuant to the provision of paragraph (2) of said Article, and

(ii) that the design and construction method conform with the technical standards prescribed by the Ordinance of METI.

(4) When any licensee of fabricating or enrichment activity has made a minor amendment to the design and construction method, as provided for by the Ordinance of METI under the proviso of paragraph (2), concerning a fuel facility for which the approval set forth in paragraph (1) has been obtained, he/she shall notify the Minister of METI of the minor amendment.

(Pre-service Inspection)

Article 16-3 (1) Any licensee of fabricating or enrichment activity shall subject his/her fuel facilities to an inspection concerning their construction work (except for the fuel facilities provided in paragraph (1) of the following Article on which welding is to be performed; hereinafter the same shall apply in the following paragraph) and performance by the Minister of METI, pursuant to the provision of the Ordinance of METI, and shall not use the fuel facilities until after the fuel facilities have passed the inspection. The same shall apply to fuel facilities when modifications are made to such fuel facilities.

(2) The inspection set forth in the preceding paragraph shall be considered as passing when the fuel facilities conform with each of the following items: (i) that the construction work of the fuel facilities has been conducted in

compliance with the design and method for which the permission set forth in paragraph (1) of the preceding Article (or modified design and method in the case that there has been permission or notification regarding an amendment pursuant to the provision of paragraph (2) or (4) or said Article) has been obtained, and

(ii) that their performance conforms with the technical standards prescribed by the Ordinance of METI.

(3) The Minister of METI shall make the Incorporated Administrative Agency

15

Japan Nuclear Energy Safety Organization (hereinafter referred to as "JNES") conduct part of the affairs pertaining to the inspection set forth in paragraph (1), pursuant to the provision of the Ordinance of METI.

(4) When the JNES has conducted part of the affairs pertaining to the inspection pursuant to the provision of the preceding paragraph, they shall, without delay, notify the Minister of METI of the results pursuant to the provision of the Ordinance of METI.

(Welding Method and Inspection)

Article 16-4 (1) Any container used for heating uranium hexafluoride and other fuel facilities specified by the Ordinance of METI that are to be welded shall be inspected by the Minister of METI when welding is to be performed, pursuant to the provision of the Ordinance of METI, and the licensee of fabricating or enrichment activity shall not use the fabricating facilities until after they have passed the inspection; provided, however, that this shall not apply to the case specified in paragraph (4) and cases specified by the Ordinance of METI.

(2) Any person who intends to undergo the inspection set forth in the preceding paragraph shall obtain approval from the Minister of METI concerning the method of welding, pursuant to the provision of the Ordinance of METI.

(3) The inspection set forth in paragraph (1) shall be considered as passing when welding conforms with each of the following items: (i) welding is being carried out in compliance with the method for which the

permission set forth in the preceding paragraph has been obtained, and (ii) welding conforms with the technical standards prescribed by the Ordinance

of METI. (4) Fuel facilities involving welding provided in paragraph (1) that have also

been imported shall be inspected by the Minister of METI concerning the welding pursuant to the provision of the Ordinance of METI, and the licensee of fabricating or enrichment activity shall not use the fuel facilities until after they have passed the inspection.

(5) The inspection set forth in the preceding paragraph shall be considered as passing when the welding conforms with the technical standards specified in item (ii) of paragraph (3).

(Facility Periodic Inspection)

Article 16-5 (1) Any licensee of fabricating or enrichment activity shall, pursuant to the provision of the Ordinance of METI, undergo an annual inspection by the Minister of METI concerning the performance of the fuel facilities specified by Cabinet Order; provided, however, that this shall not apply to the case where the approval set forth in Article 22-8 (2) has been obtained (except for the cases specified by the Ordinance of METI).

16

(2) The inspection set forth in the preceding paragraph shall be conducted with regard to whether the performance of the fuel facilities conforms with the technical standards specified in the Ordinance of METI.

(3) The Minister of METI shall make the JNES conduct part of the affairs pertaining to the inspection set forth in paragraph (1), pursuant to the provision of the Ordinance of METI.

(4) When the JNES has conducted part of the affairs pertaining to the inspection pursuant to the provision of the preceding paragraph, they shall, without delay, notify the Minister of METI of the results pursuant to the provision of the Ordinance of METI.

(Notification of Commencement of Activity, etc.)

Article 17 When a licensee of fabricating or enrichment activity has commenced, suspended or restarted the activity, he/she shall notify the Minister of METI within fifteen days from the day concerned.

(Merger)

Article 18 (1) In the case of a merger of juridical persons who are licensee of fabricating or enrichment activity (except in the case of a merger of a juridical person who is a licensee of fabricating or enrichment activity and a juridical person who is not a licensee of fabricating or enrichment activity, and where the juridical person who is the licensee of fabricating or enrichment activity continues to exist), when the approval of the Minister of METI has been obtained for the merger, the juridical person who is to continue to exist after the merger, or the juridical person who has been established by the merger shall succeed the status of licensee of fabricating or enrichment activity.

(2) The provisions of item (ii) of Article 14 (1), paragraph (2) of said Article, and Article 15 shall apply mutatis mutandis to the approval set forth in the preceding paragraph.

(Inheritance)

Article 19 (1) In the case of an inheritance with regard to a licensee of fabricating or enrichment activity, the inheritor shall succeed the status of the licensee of fabricating or enrichment activity.

(2) The inheritor who has succeeded the status of the licensee of fabricating or enrichment activity pursuant to the provision set forth in the preceding paragraph shall notify the Minister of METI of the inheritance within thirty days from the day of the inheritance, with documents to prove the inheritance.

(Rescission, etc. of the Permission)

Article 20 (1) When a licensee of fabricating or enrichment activity fails to

17

commence his/her activity within the period provided for in the Ordinance of METI, or suspends his/her activity for more than one year continuously, without a justifiable grounds, the Minister of METI may rescind the permission set forth in Article 13 (1).

(2) When a licensee of fabricating or enrichment activity falls under any of the following items, the Minister of METI may rescind the permission set forth in Article 13 (1), or specify a period not exceeding one year and order suspension of the activity for that period: (i) when a licensee of fabricating or enrichment activity falls under one of items

(ii) to (iv) of Article 15, (ii) when he/she has changed a matter for which he/she should have obtained

permission pursuant to the provision of Article 16 (1), without permission, (iii) when he/she has violated an order pursuant to the provision of Article 21-3, (iv) when he/she has violated the provision of Article 22 (1) or (4), or an order

pursuant to the provision of paragraph (3) of said Article, (v) when he/she has violated an order pursuant to the provision of Article 22-5, (vi) when he/she has violated the provision of Article 22-6 (1), (vii) when he/she has violated an order pursuant to the provision of Article 12-

2 (3) as applied mutatis mutandis pursuant to Article 22-6 (2), (viii) When he/she has violated the provision of Article 12-2 (4) as applied

mutatis mutandis pursuant to Article 22-6 (2), (ix) when he/she has violated the provision of Article 22-7 (1), (x) when he/she has violated an order pursuant to the provision of Article 12-5

as applied mutatis mutandis pursuant to Article 22-7 (2), (xi) when he/she has violated the provision of Article 22-8 (1) and has abolished

his/her fabricating or enrichment activity, (xii) when he/she has violated the provision of Article 22-8 (2), (xiii) when he/she has violated the provision of Article 58 (2), or has violated an

order pursuant to the provision of paragraph (3) of said Article, (xiv) when he/she has violated the provision of Article 59 (2), or has violated an

order pursuant to the provision of paragraph (4) of said Article, (xv) when he/she has violated the provision of Article 59-2 (2), (xvi) when he/she has violated the provision of Article 61-8 (1) or (4), or has

violated an order pursuant to the provision of paragraph (3) of said Article, (xvii) when he/she has violated the conditions of Article 62-2 (1) or (2), (xviii) when he/she has violated the provision of Article 6 of the Act on

Compensation for Nuclear Damage (Act No. 147 of 1961), or (xix) when he/she has violated the provision of Article 7 (4), Article 8 (5),

Article 9 (7) or Article 11 (6) of the Act on Special Law of Nuclear Emergency Preparedness (Act No. 156 of 1999).

18

(Records) Article 21 Pursuant to the provision of the Ordinance of METI, the licensee of

fabricating or enrichment activity shall record the matters specified in the Ordinance of METI concerning the implementation of the fabricating or enrichment activity, and keep this record at the factory or the place of activity.

(Measures To Be Taken for Operational Safety and the Protection of Specified

Nuclear Fuel Material) Article 21-2 (1) Any licensee of fabricating or enrichment activity shall,

pursuant to the provision of the Ordinance of METI, take necessary operational safety measures concerning the following matters: (i) maintenance etc. of fuel facilities, (ii) operation of fabricating or enrichment equipment, and (iii) shipment, storage or disposal of nuclear fuel material or material

contaminated by nuclear fuel material (shipment and disposal shall be limited to the premises of the factory or the place of activity where the fuel facilities have been installed; the same shall apply to the following Article).

(2) Any licensee of fabricating or enrichment activity who handles specified nuclear fuel material at a factory or a place of activity where the fabricating fuel facilities have been installed shall, if provided for by Cabinet Order, take protection measures pursuant to the provision of the Ordinance of METI.

(Suspension, etc. of the Use of Facilities)

Article 21-3 (1) When the Minister of METI finds that the performance of the fuel facilities does not conform with the technical standards set forth in Article 16-5 (2), or that the measures pertaining to the maintenance etc. of the fuel facilities, the operation of fabricating or enrichment equipment, or the shipment, storage or disposal of nuclear fuel material or material contaminated by nuclear fuel material are in violation of the provision of the Ordinance of METI pursuant to the provision of paragraph (1) of the preceding Article, he/she may order the licensee of fabricating or enrichment activity to suspend, remodel, repair or change the location of the fuel facilities, designate a method for operation fabrication or enrichment equipment or order any other necessary operational safety measures to be taken.

(2) When the Minister of METI finds that the protection measures are in violation of the provision of the Ordinance of METI pursuant to the provision of paragraph (2) of the preceding Article, he/she may order the licensee of fabricating or enrichment activity to take corrective measures, etc.

(Operational Safety Programs)

Article 22 (1) Any licensee of fabricating or enrichment activity shall, pursuant

19

to the provision of the Ordinance of METI, specify operational safety programs (including rules concerning education on operational safety related to the handling of nuclear fuel material; hereinafter the same shall apply in this Article) before commencing activity and obtain approval from the Minister of METI. The same shall apply when the licensee of fabricating or enrichment activity intends to make amendment to such program.

(2) When the Minister of METI finds that the operational safety programs are not sufficient for preventing disasters resulting from nuclear fuel material, he/she shall not grant the approval set forth in the preceding paragraph.

(3) When the Minister of METI finds that the operational safety programs need to be amended for preventing disasters resulting from nuclear fuel material, he/she may order the licensee of fabricating or enrichment activity to amend the operational safety programs.

(4) Any licensee of fabricating or enrichment activity and his/her employees shall observe the operational safety programs.

(5) Any licensee of fabricating or enrichment activity shall, pursuant to the provision of the Ordinance of METI, undergo a periodic inspection conducted by the Minister of METI regarding the compliance with the provision set forth in the preceding paragraph.

(6) The provisions of Article 12 (6) to (8) shall apply mutatis mutandis to the inspection set forth in the preceding paragraph. In this case, the term "preceding paragraph" in paragraph (6) of said Article shall be deemed to be replaced with "Article 22 (5)."

(Chief Engineer of Nuclear Fuel)

Article 22-2 (1) Any licensee of fabricating or enrichment activity shall, as provided for by the Ordinance of METI, appoint a chief engineer of nuclear fuel from among the persons who are certified chief engineers of nuclear fuel as set forth in paragraph (1) of the following Article, and have this person supervise operational safety concerning the handling of nuclear fuel material.

(2) When any licensee of fabricating or enrichment activity has appointed a chief engineer of nuclear fuel pursuant to the provision of the preceding paragraph, the licensee of fabricating or enrichment activity shall notify the Minister of METI of the appointment within thirty days from the day of the appointment. The same shall apply to the dismissal of the chief engineer of nuclear fuel.

(Certification for Chief Engineer of Nuclear Fuel)

Article 22-3 (1) The Minister of METI shall issue a certification for chief engineer of nuclear fuel to the person who falls under any of the following items: (i) a person who has passed the examination for chief engineer of nuclear fuel

20

conducted by the Minister of METI, or (ii) a person whom the Minister of METI finds, pursuant to the provision of the

Cabinet Order, to possess knowledge and experience related to the operation of nuclear fuel material equal to or more than those of the persons listed in the preceding item.

(2) The Minister of METI may, to any person who falls under any of the following items, not issue a certification for chief engineer of nuclear fuel: (i) a person who has been ordered to return his/her certification for chief

engineer of nuclear fuel pursuant to the provision of the following paragraph, and for whom one year has not yet elapsed from the day he/she was ordered to return his/her license, or

(ii) a person who has been sentenced to a penalty consisting of a fine or severer punishment for violating the provisions of this Act or an order pursuant to this Act, and for whom two years have not yet elapsed after the penalty was executed or suspended.

(3) When a person who has been issued a certification for chief engineer of nuclear fuel has violated the provisions of this Act or an order pursuant to this Act, the Minister of METI may order him/her to return his/her license.

(4) The subjects, procedures and other details of the examination for chief engineer of nuclear fuel set forth in item (i) of paragraph (1), and the procedure for issuing and returning the certification for chief engineer of nuclear fuel shall be specified in the Ordinance of METI.

(Duties, etc. of the Chief Engineer of Nuclear Fuel)

Article 22-4 (1) The chief engineer of nuclear fuel shall execute his/her duties related to the handling of nuclear fuel material in the fabricating or enrichment activity in good faith.

(2) Any person who is engaged in the handling of nuclear fuel material in the fabricating or enrichment activity shall comply with the instructions for safe handling of such nuclear fuel material given by the chief engineer of nuclear fuel.

(Order to Dismiss the Chief Engineer of Nuclear Fuel)

Article 22-5 When the chief engineer of nuclear fuel has violated the provisions of this Act or an order pursuant to this Act, the Minister of METI may order any licensee of fabricating or enrichment activity to dismiss the chief engineer of nuclear fuel.

(Physical Protection Program)

Article 22-6 (1) In the case where the provision of Article 21-2 (2) is applicable, the licensee of fabricating or enrichment activity shall, as provided for by the

21

Ordinance of METI, specify physical protection program and obtain the approval of the Minister of METI before commencing the operation of specified nuclear material. The same shall also apply when changes are made to such program.

(2) The provisions of Article 12-2 (2) to (5) shall apply mutatis mutandis to the physical protection program set forth in the preceding paragraph, and the provisions of paragraphs (6) to (8) of said Article shall apply mutatis mutandis to the inspection set forth in paragraph (5) of said Article as applied mutatis mutandis pursuant to this paragraph. In this case, the term "preceding paragraph" in paragraph (2) of said Article shall be deemed to be replaced with "Article 22-6 (1)," and the term "refining licensee of activity operator" in the provisions of paragraphs (3) to (5) of said Article shall be deemed to be replaced with "licensee of fabricating or enrichment activity."

(Physical Protection Manager)

Article 22-7 (1) In the case that the provision of Article 21-2 (2) is applicable, the licensee of fabricating or enrichment activity shall, pursuant to the provision of the Ordinance of METI, appoint a physical protection manager, from among persons who satisfy the requirements provided in the Ordinance of METI related to knowledge, etc. of the operation of specified nuclear fuel material, etc., and have this physical protection manager manage activity related to the protection of specified nuclear fuel material in a consistent manner.

(2) The provisions of Article 12-3 (2), Article 12-4 and Article 12-5 shall apply mutatis mutandis to the physical protection manager set forth in the preceding paragraph. In this case, the term "licensee of refining activity" in these provisions shall be deemed to be replaced with "licensee of fabricating or enrichment activity," and the term "refining facilities" shall be deemed to be replaced with "fuel facilities."

(Measures Associated with Abolition of the Activity)

Article 22-8 (1) When the licensee of fabricating or enrichment activity intends to abolish his/her activity, he/she shall dismantle the fuel facilities, transfer the nuclear fuel material that he/she possesses, eliminate the contamination caused by nuclear fuel material, dispose of the material contaminated by nuclear fuel material and take any other measures specified in the Ordinance of METI (hereinafter referred to as "decommissioning" in this Article and the following Article).

(2) When the licensee of fabricating or enrichment activity intends to take decommissioning measures, he/she shall draw up a plan concerning decommissioning (hereinafter referred to as "decommissioning plan" in the following Article) in advance, pursuant to the provision of the Ordinance of

22

METI, and obtain the approval of the Minister of METI. (3) The provisions of Article 12-6 (3) to (9) shall apply mutatis mutandis to the

abolition measures of the licensee of fabricating or enrichment activity. In this case, the term "preceding paragraph" in paragraph (3) of said Article shall be deemed to be replaced with "Article 22-8 (2)"; the term "two preceding paragraphs" in paragraph (4) of said Article shall be deemed to be replaced with "Article 22-8 (2) and the preceding paragraph"; the term "paragraph (2)" in paragraphs (5) and (6) of said Article shall be deemed to be replaced with "Article 22-8 (2)"; and the term "designation set forth in Article 3 (1)" in paragraph (9) of said Article shall be deemed to be replaced with "permission set forth in Article 13 (1)."

(Measures Associated with Rescission, etc. of the Permission)

Article 22-9 (1) When any licensee of fabricating or enrichment activity has had his/her permission rescinded pursuant to the provision of Article 20, or when any licensee of fabricating or enrichment activity has dissolved or died, and there is no inheritance pursuant to the provision of Article 18 (1) or Article 19 (1), the former licensee of fabricating or enrichment activity, etc. (a person who controls the inherited property in lieu of the liquidator, bankruptcy trustee or heir when the licensee of fabricating or enrichment activity has had his/her permission rescinded pursuant to the provision of Article 20 or when the licensee of fabricating or enrichment activity has dissolved or died, and there is no inheritance pursuant to the provision of Article 18 (1) or Article 19 (1); the same shall apply hereinafter) shall be deemed to be the licensee of fabricating or enrichment activity regarding the application of the provisions of Article 16-5, Articles 21 to 22-2 and Articles 22-4 to 22-7 (including penal provisions pertaining to these provisions) for the period until the confirmation as provided for in Article 12-7 (9) as applied mutatis mutandis pursuant to paragraph (5) is obtained.

(2) Pursuant to the provision of the Ordinance of METI, the former licensee of fabricating or enrichment activity, etc. shall draw up a decommissioning plan and apply for approval from the Minister of METI within the period provided for in the Ordinance of METI from the date that his/her permission as a licensee of fabricating or enrichment activity was rescinded pursuant to the provision of Article 20 or the date of dissolution or death of the licensee of fabricating or enrichment activity.

(3) The former licensee of fabricating or enrichment activity, etc. shall not take decommissioning measures for the period until he/she obtains the approval set forth in the preceding paragraph.

(4) In the case that the former licensee of fabricating or enrichment activity, etc. who shall be deemed as the licensee of fabricating or enrichment activity

23

pursuant to the provision of paragraph (1) has obtained the approval set forth in paragraph (2) (excluding cases specified by the Ordinance of METI), the provision of Article 16-5 shall not apply.

(5) The provisions of Article 12-7 (4) to (9) shall apply mutatis mutandis to decommissioning measures of former licensee of fabricating or enrichment activity, etc. In this case, the term "paragraph (2)" in these provisions shall be deemed to be replaced with "Article 22-9 (2)"; the term "paragraph (4) of the preceding Article" in paragraph (5) of said Article shall be deemed to be replaced with "paragraph (4) of the preceding Article as applied mutatis mutandis pursuant to Article 22-8 (3)"; and the term "paragraph (8) of the preceding Article" in paragraph (9) of said Article shall be deemed to be replaced with "paragraph (8) of the preceding Article as applied mutatis mutandis pursuant to Article 22-8 (3)."

Chapter IV Regulations Concerning the Installment, Operation, Etc. of

Reactors

(Installment license) Article 23 (1) Any person who intends to install a reactor shall, in accordance

with the classifications of reactors listed in the following items, obtain the permission of the Minister prescribed respectively in those items, pursuant to the provision of the Cabinet Order. (i) Nuclear reactors for providing electric power generation (excluding those

that fall under any of items (ii) to (iv) below; hereinafter referred to as "commercial power reactors"): Minister of METI

(ii) Nuclear reactors that are installed on vessels (excluding those that fall under items (iv) or (v); hereinafter referred to as "commercial marine reactors"): Minister of Land, Infrastructure and Shipment (hereinafter referred to as "Minister of MLIT")

(iii) Nuclear reactors for providing research and test (excluding those that fall under the preceding item, the following item or item (v)): Minister of MEXT

(iv) Nuclear reactors for providing electric power generation that are specified by Cabinet Order as reactors in the stage of research and development: Minister of METI

(v) Nuclear reactors other than those for providing electric power generation that are specified by Cabinet Order as reactors in the stage of research and development: Minister of MEXT

(2) Any person who intends to obtain the permission set forth in the preceding paragraph shall submit an application form containing the following matters to the competent minister (the minister prescribed respectively in those items in accordance with the classification of nuclear reactors listed in items of the

24

preceding paragraph; hereinafter the same shall apply in this Chapter): (i) the name and address of the applicant and, in the case of a juridical person,

the name of its representative, (ii) the purpose for which the reactors are to be used, (iii) the type, thermal output and number of reactors, (iv) the name and address of the factory or place of activity where the reactors

are to be installed (in the case that the reactors are to be installed on a vessel, the name and address of the factory or place of activity of the shipbuilder who is to build the vessel and the address of the vessel when performing construction for installing the reactors),

(v) the location, structure and equipment of the reactors and auxiliary facilities (hereinafter referred to as "reactor facilities"),

(vi) the construction plan for reactor facilities, (vii) the type and amount scheduled for annual use of nuclear fuel material to

be used as fuel for the reactors, and (viii) the method for disposing of spent fuel.

(3) When the Minister of MEXT, the Minister of METI and the Minister of MLIT intend to plan to enact, revise or abolish the Cabinet Order set forth in items (iv) and (v) of paragraph (1), they shall hear, in advance, the opinion of the Atomic Energy Commission and the Nuclear Safety Commission.

(Permission pertaining to Reactors Installed on Foreign Nuclear Vessels)

Article 23-2 (1) Any person other than one who possesses Japanese nationality, a juridical person established in accordance with Japanese laws and regulations or any other organization (excluding a person who has obtained the permission set forth in paragraph (1) of the preceding Article (hereinafter referred to as "licensee of reactor operation")) who intends to put a vessel equipped with reactors (hereinafter referred to as "nuclear vessel") (excluding war vessels; hereinafter referred to as "foreign nuclear vessels") that he/she owns into the water areas of Japan shall, pursuant to the provision of the Cabinet Order, obtain the permission of the Minister of MLIT to maintain reactors in Japan in association with placing such foreign nuclear vessels in the water areas of Japan.

(2) Any person who intends to obtain the permission set forth in the preceding paragraph shall submit an application form containing the following matters: (i) the name of the vessel, and (ii) the matters listed in items (i) to (iii) and in items (v) and (viii) of paragraph

(2) of the preceding Article.

(Criteria for the Permission) Article 24 (1) In the case that an application for the permission set forth in

25

Article 23 (1) is made, the competent minister shall not grant the permission in said paragraph unless he/she finds that the application conforms with each of the following items: (i) that the reactors will not be utilized for non-peaceful purposes, (ii) that granting the permission will not hinder the planned development and

utilization of atomic energy, (iii) that the applicant (including the shipbuilder who constructs the vessel in

the case that reactors are to be installed on a vessel) has sufficient technical capability and financial basis necessary for establishment of reactors, and has sufficient technical capability for operating the reactors competently, and

(iv) that the location, structure and equipment of the reactor facilities are such that they will not hinder the prevention of disasters resulting from nuclear fuel material (including spent fuel; the same shall apply hereinafter), material contaminated by nuclear fuel material (including fission products; the same shall apply hereinafter) or the reactors.

(2) In granting the permission set forth in Article 23 (1), the competent minister shall hear, in advance, the opinion of the Atomic Energy Commission with respect to the application of the criteria provided in items (i), (ii) and (iii) of the preceding paragraph (limited to the portion pertaining to financial basis only), and the opinion of the Nuclear Safety Commission with respect to the application of the criteria provided in item (iii) (limited to the portion pertaining to technical capability only) and item (iv) of said paragraph.

Article 24-2 (1) In the case that an application for the permission set forth in

Article 23-2 (1) is made, the Minister of MLIT shall not grant the permission set forth in Article 23-2 (1) unless he/she finds that the application conforms with the matters listed in items (i), (iii) (limited to the portion pertaining to operation of the reactors only) and (iv) in paragraph (1) of the preceding Article.

(2) The provision of paragraph (2) of the preceding Article shall apply mutatis mutandis to the permission set forth in Article 23-2 (1).

(Ineligibility for the Permission)

Article 25 Any person who falls under any of the following items shall not be granted the permission set forth in Article 23 (1) or Article 23-2 (1): (i) a person whose permission set forth in Article 23 (1) or Article 23-2 (1) has

been rescinded pursuant to the provision of Article 33 (2) or (3), and for whom two years have not yet elapsed from the day of the rescission,

(ii) a person who has been sentenced to a penalty consisting of a fine or severer punishment for violating the provisions of this Act or an order pursuant to this Act, and for whom two years have not yet elapsed after the penalty was

26

executed or suspended. (iii) an adult ward, or (iv) a juridical person any of whose executive officials falls under any of the

three preceding items.

(Permission for and Notification, etc. of Changes) Article 26 (1) When any licensee of reactor operation intends to change any

matter provided for in items (ii) to (v), or item (viii) of Article 23 (2), he/she shall obtain the permission of the competent minister, pursuant to the provision of the Cabinet Order; provided, however, that this shall not apply to changing, from among the matters listed in item (iv) of said paragraph, only the name of the factory or the place of activity.

(2) When a licensee of reactor operation has amended any matter provided for in item (i), (vi) or (vii) of Article 23 (2), except the case provided for in Article 32 (1), he/she shall notify the competent minister of the amendment within thirty days from the day that the amendment was made. The same shall apply to amendments made to, from among the matters listed in item (iv) of said paragraph, only the name of the factory or the place of activity.

(3) In a case where the reactors listed in item (iv) or (v) of Article 23 (1) are installed on a vessel, and when the registration of the vessel set forth in Article 5 (1) of the Ship Act (Act No. 46 of 1899) has been carried out, the reactor establisher shall notify the Minister of METI or the Minister of MEXT of the name of the vessel within thirty days from the day of the registration. The same shall apply when amendments are made to this name.

(4) The provision of Article 24 shall apply mutatis mutandis to the permission set forth in paragraph (1).

Article 26-2 (1) When a person who has obtained the permission set forth in

Article 23-2 (1) (hereinafter referred to as "operator of a foreign nuclear vessel") intends to amend the matter listed in item (ii) of paragraph (2) of said Article in Japan (excluding cases where the provision of the following paragraph is applicable), or intends to place a foreign nuclear vessel in the water areas of Japan after having amended these matters outside of Japan, he/she shall obtain the permission of the Minister of MLIT with respect to such amendments and the maintenance of the reactors pertaining to the amendments in Japan, pursuant to the provision of the Cabinet Order.

(2) When the operator of a foreign nuclear vessel has amended the matters specified in item (i) of Article 23-2 (2) in Japan, or a matter in item (ii) of said paragraph that pertains only to item (i) of Article 23 (2), he/she shall notify, without delay, the Minister of MLIT of such amendments. The same shall apply when a foreign nuclear vessel enters the water areas of Japan after

27

amending only these matters outside of Japan. (3) The provision of Article 24-2 shall apply mutatis mutandis to the permission

set forth in paragraph (1).

(Approval of the Design and Construction Method) Article 27 (1) Any licensee of reactor operation shall, pursuant to the provision

of the Ordinance of the competent ministry (order issued by the competent minister; hereinafter the same shall apply in this Chapter) obtain the approval of the competent minister with respect to the design and construction method of the reactor facilities (except for welding methods pertaining to reactor facilities provided in Article 28-2 (1) that are to be welded; hereinafter the same shall apply in this Article) before commencing construction work on the reactor facilities. The same shall also apply when making modifications to the reactor facilities.

(2) When any licensee of reactor operation intends to amend the design and construction method related to a reactor facility for which the approval set forth in the preceding paragraph has been obtained, he/she shall obtain approval from the competent minister pursuant to the provision of the Ordinance of the competent ministry; provided, however, that this shall not apply to a minor amendment as provided for by the Ordinance of the competent ministry.

(3) When the competent minister finds that the design and construction method pertaining to the application for the approval set forth in the two preceding paragraphs conform with the following items, he/she shall grant the approval set forth in the two preceding paragraphs: (i) the design and construction method have been granted the permission set

forth in Article 23 (1) or Article 26 (1), or an application for approval has been submitted pursuant to the provision of paragraph (2) of said Article, and

(ii) the design and construction method conform with the technical standards prescribed by the Ordinance of the competent ministry.

(4) When any licensee of reactor operation has made a minor amendment to the design and construction method of a reactor facility for which the approval set forth in paragraph (1) has been obtained, he/she shall notify the competent minister of the minor amendment, pursuant to the provision of the Ordinance of the competent ministry under the proviso of paragraph (2).

(Pre-operational Inspection)

Article 28 (1) Any licensee of reactor operation shall subject his/her reactor facilities to an inspection concerning their construction work (except for the reactor facilities provided for in paragraph (1) of the following Article on which

28

welding is to be performed; hereinafter the same shall apply in the following paragraph) and performance by the competent minister, as pursuant to the provision of the Ordinance of the competent ministry, and shall not use the reactor facilities until after the reactor facilities have passed the inspection. The same shall apply to reactor facilities when modifications are made to such reactor facilities.

(2) The inspection set forth in the preceding paragraph shall be considered as passing when the reactor facilities conform with each of the following items: (i) that the construction work has been carried out in compliance with the

design and method for which the approval set forth in paragraph (1) of the preceding Article (or modified design and method in the case that there has been approval or notification regarding an amendment pursuant to the provision of paragraph (2) or paragraph (4) of said Article) has been obtained, and

(ii) that their performance conforms with the technical standards prescribed by the Ordinance of the competent ministry.

(3) The provisions of Article 16-3 (3) and (4) shall apply mutatis mutandis to the inspection set forth in paragraph (1) (limited to commercial power reactors and the reactors listed in item (iv) of Article 23 (1)).

(Welding Method and Inspection)

Article 28-2 (1) Any reactor container and other reactor facilities specified by the Ordinance of the competent ministry that are to be welded shall be inspected by the competent minister with respect to the welding, pursuant to the Ordinance of the competent ministry, and the reactor establisher may not use such containers or reactor facilities until after they have passed the inspection; provided, however, that this shall not apply to the case specified in paragraph (4) and cases specified by the Ordinance of the competent ministry.

(2) A person who intends to undergo the inspection set forth in the preceding paragraph shall obtain approval from the competent minister concerning the method of welding, pursuant to the provision of the Ordinance of the competent ministry.

(3) The inspection set forth in paragraph (1) shall be considered as passing when welding conforms with each of the following items: (i) welding is being carried out in compliance with the method for which the

approval set forth in the preceding paragraph has been obtained, and (ii) welding conforms with the technical standards prescribed by the Ordinance

of the competent ministry. (4) Reactor facilities involving welding provided in paragraph (1) that have also

been imported shall be inspected by the competent minister concerning the welding pursuant to the provision of the Ordinance of the competent ministry,

29

and the reactor establisher shall not use the reactor facilities until after they have passed the inspection.

(5) The inspection set forth in the preceding paragraph shall be considered as passing when the welding conforms with the technical standards specified in item (ii) of paragraph (3).

(Facility Periodic Inspection)

Article 29 (1) Any reactor establisher shall, pursuant to the provision of the Ordinance of the competent ministry, undergo an annual inspection by the competent minister concerning the performance of the reactor facilities specified by Cabinet Order; provided, however, that this shall not apply to the case where the approval set forth in Article 43-3-2 (2) has been obtained, unless otherwise provided for by the Ordinance of the competent ministry.

(2) The inspection set forth in the preceding paragraph shall be conducted with regard to whether the performance of the reactor facilities conforms with the technical standards specified in the Ordinance of the competent ministry.

(3) The provisions of Article 16-5 (3) and (4) shall apply mutatis mutandis to the inspection set forth in paragraph (1) (limited to commercial power-generation reactors and the reactors listed in item (iv) of Article 23 (1)).

(Operation Plan)

Article 30 Any licensee of reactor operation shall, pursuant to the Ordinance of the competent ministry (Ordinance of the Ministry of Education, Culture, Sports, Science and Technology (hereinafter referred to as "Ordinance of MEXT") and Ordinance of METI with respect to the reactors listed in item (iii) of Article 23 (1) that are to be used for electric power generation; Ordinance of METI and Ordinance of the Ministry of Land, Infrastructure and Transport (hereinafter referred to as "Ordinance of MLIT") with respect to the reactors listed in item (iv) of said paragraph that are to be installed on a vessel; Ordinance of MEXT and Ordinance of MLIT with respect to the reactors listed in item (v) of said paragraph that are to be installed on a vessel), establish an operation plan for the reactors pertaining to their installation (except for the reactors that fall under those provided for by Cabinet Order) and notify the competent minister (Minister of MEXT and Minister of METI with respect to the reactors listed in item (iii) of said paragraph that are to be used for electric power generation; Minister of METI and Minister of MLIT with respect to the reactors listed in item (iv) of said paragraph that are to be installed on a vessel; Minister of MEXT and Minister of MLIT with respect to the reactors listed in item (v) of said paragraph that are to be installed on a vessel) of the plan. The same shall apply when changes are made to such plans; provided, however, that this shall not apply to the reactors for which the approval set

30

forth in Article 43-3-2 (2) has been obtained.

(Merger) Article 31 (1) In the case of a merger of juridical persons who are licensee of

reactor operation (except in the case of a merger of a juridical person who is a licensee of reactor operation and a juridical person who is not a licensee of reactor operation, and where the juridical person who is the licensee of reactor operation continues to exist), when the approval of the competent minister has been obtained for the merger, the juridical person who is to continue to exist after the merger, or the juridical person who has been established by the merger shall succeed the status of licensee of reactor operation.

(2) The provisions of items (i) to (iii) of Article 24 (1), paragraph (2) of said Article and Article 25 shall apply mutatis mutandis to the approval set forth in the preceding paragraph.

(Inheritance)

Article 32 (1) In the case of an inheritance with regard to a licensee of reactor operation, the inheritor shall succeed the status of the licensee of reactor operation.

(2) The inheritor who has succeeded the status of the licensee of reactor operation pursuant to the provision set forth in the preceding paragraph shall notify the competent minister of the inheritance within thirty days from the day of the inheritance, with documents to prove the inheritance.

(Rescission, etc. of the Permission)

Article 33 (1) When a licensee of reactor operation fails to commence operation of his/her reactors within the period provided for in the Ordinance of the competent ministry, or suspends operation for more than one year continuously, without a justifiable reason, the competent minister may rescind the permission set forth in Article 23 (1).

(2) When a licensee of reactor operation falls under any of the following items, the competent minister may rescind the permission set forth in Article 23 (1), or specify a period not exceeding a year and order suspension of operation for that period: (i) when a licensee of reactor operation falls under one of items (ii) to (iv) of

Article 25, (ii) when he/she has changed a matter for which he/she should have obtained

permission pursuant to the provision of Article 26 (1), without the permission, (iii) when he/she has violated an order pursuant to the provision of Article 36

or Article 36-2 (4), (iv) when he/she has violated the provision of Article 37 (1) or (4), or an order

31

pursuant to the provision of paragraph (3) of said Article, (v) when he/she has violated an order pursuant to the provision of Article 43, (vi) when he/she has violated the provision pursuant of Article 43-2 (1), (vii) when he/she has violated an order pursuant to the provision of Article 12-

2 (3) as applied mutatis mutandis pursuant to Article 43-2 (2), (viii) when he/she has violated the provision of Article 12-2 (4) as applied

mutatis mutandis to Article 43-2 (2), (ix) when he/she has violated the provision of Article 43-3 (1), (x) when he/she has violated an order pursuant to the provision of Article 12-5

as applied mutatis mutandis pursuant to Article 43-3 (2), (xi) when he/she has abolished a reactor in violation of the provision of Article

43-3-2 (1), (xii) when he/she has violated the provision of Article 43-3-2 (2), (xiii) when he/she has violated the provision of Article 58 (2), or has violated an

order pursuant to the provision of paragraph (3) of said Article, (xiv) when he/she has violated the provision of Article 59 (2), or has violated an

order pursuant to the provision of paragraph (4) of said Article, (xv) when he/she has violated the provision of Article 59-2 (2), (xvi) when he/she has violated the provision of Article 61-8 (1) or (4), or has

violated an order pursuant to the provision of paragraph (3) of said Article, (xvii) when he/she has violated the conditions of Article 62-2 (1) or (2). (xviii) when he/she has violated the provision of Article 6 of the Act on

Compensation for Nuclear Damage, (xix) when he/she has violated an order pursuant to Article 7 (4), Article 8 (5),

Article 9 (7) or Article 11 (6) of the Act on Special Measures Concerning Nuclear Emergency, or

(xx) when he/she has been disposed of pursuant to the provision of Article 37-2 (1) of the Act on Port Regulations (Act No. 174 of 1948) (including the cases where applied mutatis mutandis pursuant to Article 37-3 of said Act), or when he/she has violated the provision of Article 21 (1) of said Act as applied mutatis mutandis pursuant to paragraph (2) of said Article (including the cases where applied mutatis mutandis pursuant to Article 37-3 of said Act).

(3) When the operator of a foreign nuclear vessel falls under any of the following items, the Minister of MLIT may rescind the permission set forth in Article 23-2 (1): (i) when he/she falls under item (i), (iii), (xiii), (xiv) or (xx) of the preceding

paragraph, (ii) when he/she has changed or maintained Article 26-2 (1) without obtaining

the permission set forth in the said paragraph, or (iii) when he/she has violated the conditions of Article 62-2 (1).

32

(Records) Article 34 Pursuant to the provision of the Ordinance of the competent ministry,

the licensee of reactor operation shall record the matters specified in the Ordinance of the competent ministry concerning the operation of the reactors and other uses of the reactor facilities, and keep this record at the factory or the place of activity (in the case of reactors installed on a vessel, the vessel or the office of the reactor establisher).

(Measures To Be Taken for Safety and the Physical Protection of Specified

Nuclear Fuel Material) Article 35 (1) Any licensee of reactor operation and any operator of a foreign

nuclear vessel shall, pursuant to the provision of the Ordinance of the competent ministry (in the case of an operator of a foreign nuclear vessel, the Ordinance of MLIT), take necessary operational safety measures concerning the following matters: (i) maintenance etc. of reactor facilities, (ii) operation of reactors, and (iii) shipment, storage or disposal of nuclear fuel material or material

contaminated by nuclear fuel material (shipment and disposal shall be limited to the factory or the place of activity (including reactor vessels; hereinafter the same shall apply in the following paragraph) where the reactor facilities have been installed; hereinafter the same shall apply to paragraph (1) of the following Article).

(2) Any licensee of reactor operation or operator of a foreign nuclear vessel who handles specified nuclear fuel material at a factory or a place of activity where the reactor facilities have been installed shall, if provided for by Cabinet Order, take protection measures pursuant to the provision of the Ordinance of the competent ministry (in the case of an operator of a foreign nuclear vessel, the Ordinance of MLIT).

(Suspension, etc. of the Use of Facilities)

Article 36 (1) When the competent minister (in the case of an operator of a foreign nuclear vessel, the Minister of MLIT) finds that the performance of the reactor facilities does not conform with the technical standards set forth in Article 29 (2), or that the measures pertaining to the maintenance etc. of the reactor facilities, the operation of the reactors, or that the shipment, storage or disposal of nuclear fuel material or material contaminated by nuclear fuel material is in violation of the provision of the Ordinance of the competent ministry or of the Ordinance of the MLIT pursuant to the provision of paragraph (1) of the preceding Article, he/she may order any licensee of reactor operation or any operator of a foreign nuclear vessel to suspend use, remodel,

33

repair or change the location of the reactor facilities, designate a method for operating the reactors or order the necessary safety measures to be taken.

(2) When the competent minister (in the case of an operator of a foreign nuclear vessel, the Minister of MLIT) finds that the protection measures are in violation of the provision of the Ordinance of the competent ministry or of the Ordinance of MLIT pursuant to the provision of paragraph (2) of the preceding Article, he/she may order any licensee of reactor operation or any operator of a foreign nuclear vessel to take corrective measures, etc.

(Notification, etc. of the Entry of a Nuclear Vessel into a Port)

Article 36-2 (1) When any reactor establisher (limited to a person who has installed reactors on a vessel; hereinafter the same shall apply in this Article) intends to place a nuclear vessel in a port of Japan, he/she shall notify the Minister of MLIT (in the case of a vessel on which a reactor other than a commercial marine reactor has been installed, the Minister of MEXT) in advance, pursuant to the provision of the Ordinance of the MLIT (in the case of a vessel on which a reactor other than a commercial marine reactor has been installed, the Ordinance of MEXT).

(2) When any operator of a foreign nuclear vessel intends to place a foreign nuclear vessel in a port of Japan, he/she shall notify the Minister of MLIT in advance, pursuant to the provision of the Ordinance of the MLIT.

(3) When the notification pursuant to the provision of paragraph (1) is made, the Minister of MEXT shall, if he/she finds it necessary, notify the Minister of MLIT of matters pertaining to measures to be taken by the reactor establisher to prevent disasters resulting from nuclear fuel material, material contaminated by nuclear fuel material, or the reactors, pursuant to the provision of the Ordinance of MEXT.

(4) When the notification pursuant to the provision of paragraph (1) or (2) is made, and the Minister of MLIT finds it necessary, or when the notification set forth in the preceding paragraph is made, he/she shall order the reactor establisher or the operator of a foreign nuclear vessel to take necessary measures for preventing disasters resulting from nuclear fuel material, material contaminated by nuclear fuel material, or the reactors, and shall also instruct, through the Commander of the Japan Coast Guard, the director of the port pertaining to the notification set forth in paragraph (1) or (2) (in the case of a port other than one provided in the provision of Article 3 (2) of the Act on Port Regulations, the director of the Office of the Regional Coast Guard Headquarters who exercises authority as director of the port, pursuant to the provision of Article 37-3 of said Act) to take the necessary regulations concerning navigation of the relevant reactor vessels.

34

(Operational Safety Programs) Article 37 (1) Any licensee of reactor operation shall, pursuant to the provision

of the Ordinance of the competent ministry, specify operational safety programs (including rules for operational safety education related to operation of the reactors; hereinafter the same shall apply in this Article) before commencing operation of the reactors, and obtain approval from the competent minister. The same shall apply when the licensee of reactor operation intends to amend such programs.

(